Removal of Intermediaries in Railways: How Savings and Management Responsibility are Verified

What statement was released

News source reports on 12 October the Prime Minister's statement regarding the removal of intermediaries from railway operations. The stated 70 million GEL refers to expected additional revenue; in this study, a realised result confirmed by a relevant audit was not obtained. The report also highlights the issue of investigation and supervisory responsibility, although a final legal conclusion has not been presented.

What duty does management have

Article 50 of the Law on Entrepreneurs regulates the duty of care and diligent management of a manager. Article 52 links the assessment of business decisions to reasonable information, the company's interests, and relevant conditions. A poor economic outcome does not automatically imply a violation; however, an action taken illegally or due to a conflict of interest cannot be justified solely by "business risk".

The existence of an intermediary is not a violation in itself

It is necessary to verify what the intermediary provided: client acquisition, logistical services, financial guarantees, or other real functions. Then, the price, performance, available direct alternatives, and information at the time of contract conclusion should be compared. Using today's better conditions as evidence of an illegal past without this comparison will not be reliable.

Particularly important are the ultimate beneficial owner of the intermediary and any potential connection with management. To assess a conflict of interest, specific data, minutes of decisions, and the transaction approval process are required. The responsibility of a supervisory body member should also be assessed by their authority and actual actions, not merely by their job title.

How potential damage is calculated

A forecast of additional revenue and past damages incurred are different calculations. For damages, a specific violation, loss, and a causal link between them are required. Freight volume, market price, currency, and other costs must also be compared. The total amount of revenue growth may not be equal to the intermediary's remuneration.

• Intermediary's contract, annexes, payments, and services rendered.
• Materials for decision preparation and approval.
• Data on beneficial owners and potential conflicts.
• Financial comparison of old and new periods compiled using a single method.

Publicity and Investigation

The existence of public interest is important, but not all documents of all state companies are public under the same rules. When requesting information, the legal status of the organisation and specific materials, protected data, and possible exceptions must be determined. The initiation of an investigation does not mean the establishment of a crime by an individual manager.

Conclusion

The result of the new direct model should be assessed with transparent financial data. The issue of responsibility for old management requires its own evidence and procedure. Related areas for the company are corporate compliance and business dispute resolution.

Verification Date

Legislation and cited sources have been verified as of 12 October 2026. The analysis is based on available materials and does not automatically reflect developments subsequent to the published report.